The Path to Open Source: Venture Capitalism?
The impact of a venture capital investment in the decision
to release the source code for Principia.
by Liz Coolbaugh, December 3rd, 1998 (original article)
announcement that Digital Creations is releasing the source
code for its flagship product, Principia, was made at the Python
Conference last month and reported shortly thereafter in the Linux Weekly News. Since
then, we've been following up with Paul Everitt at Digital
Creations to find out how this decision came about and what the
results would be. Many interesting tidbits have cropped up as a
result. One that particularly interested us was the involvement
of the venture capital firm, Verticality
Investment Group, LLC (ViG), in the decision to release the
source code for Principia.
ViG's investment in Digital Creations was announced on
Shortly thereafter, the staff of Digital Creations got
together to discuss unification of Principia and Bobo. At that
time, Bobo was a free, open source web toolkit that gained rapid
popularity as being "the one toolkit that did it right."
Principia, a commercial product, is a mature and easy-to-use web
application development platform that allows applications to be
quickly constructed and managed through a web interface, without
requiring any actual code. It includes a simple HTML interface,
many pre-built web objects and an API for building additional web
objects, making Principia "useful right out of the box".
Digital Creations, a small, growing company, was finding it
difficult to have two primary products. Bobo and Principia "required
two separate messages to articulate, two different groups of
customers to nurture, two documentation efforts, two engineering
efforts, etc.", commented Paul Everitt. While Bobo was
popular, the company focus was on Principia. It made sense to
find ways to reduce duplication of effort.
Early discussion focused on creating a free, but closed source
"plugin" of Principia to use with Bobo. In discussing
the possibility with active members of their mailing lists, the
idea was found to be confusing and failed to achieve the goal of
unifying the Principia and Bobo products. The possibility of
making Principia open source was first mentioned by Jim Fulton,
CTO of Digital Creations. Paul tells of the mirth that evoked,
"We all kind of laughed and got back to the important stuff
-- bickering about the intellectual property value of the tree
Then Hadar Pedhazur, principal of ViG, the venture capitalist
firm that had invested in Digital Creations, took a hand. With
and experience, he sat down with Paul Everitt and staff and
led them through the process of determining exactly what made
their company valuable and how Principia fit into that process.
Several quotes made in the announcement of ViG's investment
clarify what value ViG saw when they chose to invest.
Digital Creations will use the funding to
significantly grow its consulting business. The company's
powerful Principia web application platform has been
developed over the last two years and used in high scale,
dynamic web sites for business applications. With this
software architecture, Digital Creations brings a significant
advantage in projects focused on time, value, and certainty
This quote makes it easy to compare the decision to release
the source code of Principia with the decision to release the
source for the Netscape web browser. In both cases, the actual
company revenues are then generated from vertical products and
services that work with the flagship products.
Hadar Pedhazur summed up this perspective by stating,
Digital Creations will emerge as a significant force
in the web application services market. Their architecture
resonates with how the web is now integral to the global
business community. Digital Creations is an aggressive,
responsive company that owns transformative technology and is
now moving into the larger arena of consulting.
The transformative technology mentioned is Principia. The
value of Principia lies in its ability to attract and convince
new customers that Digital Creations is the best consulting firm
to implement their web solutions. The software's value is
directly in-line with how well known the product is and how much
of the market share it can capture. Going open source improves
Principia's ability to do both of these. Paul Everitt commented,
"How valuable is the killer app that no one knows
Eventually a large number of reasons for taking Principia open
source were found, including expanding the user base, improving
and widening the brand identity, making the software rock solid,
battle-tested, and bulletproof, fostering a community that can
serve as an "army of messengers", and dramatically
increasing the pace of innovation and responsiveness to new
technical trends, such as XML and WebDAV.
The result was that Hadar Pedhazur, representing ViG, made the
recommendation that the source code to Principia be released.
Surprised at first, Paul Everitt and staff moved quickly forward
to discuss the idea with Eric Raymond, discuss licensing issues
and finally make their announcement at the Python conference.
(More details are available in Paul Everitt's diary).
The results: Zope
The Z Object Publishing Environment, a.k.a.
"Zope", is a free, open source web application platform
that can be used for building high-performance, dynamic web
sites. The new product is built on both Principia and Bobo, as
well as Aqueduct, Digital Creations relational database
integration software. The result is a strong development
platform, in which you can build objects, design a structure and
then allow Zope to provide access to your objects in a natural,
elegant manner. Zope is well positioned to become the free, open
source alternative to commercial products like Cold Fusion,
Silverstream and Netscape Application Server. For more
information on what Zope is, check out Zope's Question and Answer
During the days since the initial announcement, Paul Everitt
has worked to get input on the planned license for Zope. A draft version
of the license is now available for review and comment.
The license is open source, but it is not a GPL license and
does not prevent the existing code from being integrated into a
commercial product, though modifications to Zope must be
distributed as patches. The emphasis of the license is on
guaranteeing that Digital Creations receives attribution and
credit for their work, obviously a critical issue if they want to
use this platform to build their consulting business. In
addition, they are providing the community with the ability to
register their use of Zope. The registration information helps
them demonstrate the width and breadth of Zope's customer base.
The web site for Zope is
expected to be available this week and Zope 1.9beta, the first
open source version of the Zope software, will be released on
Friday, December 4th.
From here on out, Zope will rise or fall based on how well its
open source compatible license is received in the community and
how well it works for the people who give it a try. Its success
or failure will in turn affect the viability of Digital
Creations. If they and ViG have made the right choice, as we
believe they have, the release of the Zope source code will have
a dramatic impact on Digital Creations. In turn, it will serve as
another example of the value of open source code to the business
community. In the meantime, no matter what the outcome, the rest
of us have gained an excellent tool that we can use, improve,
share and know will continue to be around as long as we find it